Home Financing: Start With What You Can Comfortably Afford
Home Financing: Start With What You Can Comfortably Afford
Before you start looking at homes, one of the most important things you can do is understand what you are comfortable spending each month.
Getting approved for a certain loan amount does not necessarily mean that is the amount you should spend.
At Castle Gate Realty, we encourage buyers to look at the entire picture first, including their monthly payment, taxes, homeowners insurance, and other financial obligations.
How much house can I comfortably afford?
Start with the monthly payment, not the purchase price.
Ask yourself:
What monthly housing payment would fit comfortably into my budget?
Your total monthly mortgage payment may include:
- Principal
- Interest
- Property taxes
- Homeowners insurance
- Mortgage insurance, if applicable
- HOA or community fees, if applicable
You may qualify for a higher payment than you actually want to make every month.
Buying a home should not leave you feeling financially stretched. Decide what payment feels comfortable for your household before deciding how much house to buy.
Should I talk with a real estate agent before getting prequalified?
Yes.
We recommend meeting with a Castle Gate Realty buyer's agent for a Buyer Consultation very early in the process, even if you are not ready to start touring homes yet.
Your Castle Gate agent can explain:
- How the homebuying process works
- What to expect from financing and prequalification
- Current market conditions
- Typical upfront and closing costs
- Different types of inspections you may want to consider
- How property taxes can affect your monthly payment
- What happens once you find a home you want to purchase
- How to prepare before you begin making offers
A Buyer Consultation gives you an opportunity to ask questions and understand the process before important financial decisions have to be made.
Do I need to be prequalified before looking at homes?
You should become prequalified early in the homebuying process.
A mortgage lender can review your income, debts, credit, available funds, and other financial information to help determine the loan programs and price range for which you may qualify.
Your lender can also estimate what your monthly payment could look like at different purchase prices.
Remember, however, that the amount a lender says you qualify to borrow and the amount you are comfortable spending are not necessarily the same number.
Where can I find a mortgage lender?
Castle Gate Realty maintains a list of Trusted Pros, including mortgage professionals our buyers can contact about financing and prequalification.
VIEW OUR TRUSTED PROS - LOCAL LENDERS
You are never required to use one of our recommended lenders. Buyers are free to choose the mortgage lender that is right for them.
What should I ask a mortgage lender?
When speaking with a lender, consider asking:
- What loan programs may be available to me?
- How much down payment would I need?
- What would my estimated monthly payment be?
- Does that payment include estimated property taxes and homeowners insurance?
- Will I have mortgage insurance?
- Approximately how much money will I need for closing?
- Are there lender fees or points?
- Is my interest rate locked, and if so, for how long?
- Are there any programs that may help with down payment or closing costs?
Should I use a mortgage calculator?
A mortgage calculator can be helpful for estimating payments and comparing different purchase prices, down payments, and interest rates.
Use the calculator below as a planning tool, but remember that your actual payment can vary based on the loan program, current interest rate, property taxes, insurance, mortgage insurance, HOA fees, and other factors.
Mortgage Calculator
Use the mortgage calculator below to experiment with different home prices and monthly payments.
Once you have an idea of what feels comfortable, the next step is to schedule a Buyer Consultation with a Castle Gate Realty agent and speak with a qualified mortgage professional.
Castle Gate Realty
Honor. Strength. Proven Results.